Huacan Optoelectronics acquires semiconductor and IoT-driven sensors

Huacan Optoelectronics recently made a significant move in the tech industry by announcing its first asset restructuring plan. The main target of this reorganization is Harmony Corelight (Yiwu) Optoelectronics Technology Co., Ltd., which has acquired 100% of the shares of American New Semiconductor Co., Ltd. This acquisition marks Huacan’s strategic entry into the Internet of Things (IoT) sector, aiming to expand beyond its traditional LED chip business. According to an industry analyst from a brokerage firm, this acquisition allows Huacan to shift its focus from LED chips to core IoT technologies and fundamental MEMS sensor businesses. The company expects these two areas to develop synergistically in the future, creating new growth opportunities. With the rapid expansion of the IoT market, the demand for sensors is expected to surge significantly. Forrester Research predicts that by 2020, the IoT industry will be 30 times larger than the information internet. Many companies, including Sambo Technology, are already investing heavily in IoT applications. A report from Guoxin Securities highlights the rising demand for sensors, with the global sensor market growing from $82.8 billion in 2011 to an estimated $158.7 billion by 2015, nearly doubling in just four years. On July 21, Huacan Optoelectronics, known for its LED chip manufacturing, announced a preliminary restructuring plan. The company plans to issue shares to acquire assets, specifically targeting Harmony Core (Yiwu) Optoelectronics Technology Co., Ltd. This entity will purchase 100% of the equity of Meixin Company, a leading player in the global MEMS sensor industry. The transaction price is based on a price-to-earnings ratio of 15 to 20 times the U.S. company’s 2017 forecasted net profit, with the final price determined by an evaluation agency. Meixin was originally spun off from ADI’s MEMS division in 1999 and became the first and only publicly listed company focused solely on MEMS products. Today, it specializes in developing and producing sensor solutions, covering acceleration, vibration, geomagnetic guidance, current, flow, and temperature measurement. The analyst noted that Huacan’s cross-border M&A could boost China’s semiconductor market and drive the development of MEMS sensors under the IoT boom. Zhao Yang, chairman of Huacan, emphasized that the goal is to enhance the MEMS sensor industry. He stated that sensor products are crucial for integrating people, nature, and machines. Meixin is one of the few companies that rely on pure MEMS sensors for profitability, and Huacan’s technological innovations can provide more resources to advance these technologies. Zhao also highlighted that the company has been focusing on MEMS and microelectronics monolithic integration technology for 17 years, achieving leadership in wafer-level packaging patents. These technologies have enabled mass production, giving Huacan a competitive edge. The next step is to develop 6-axis and 9-axis monolithic integrated products. Teng Yong, a global deputy director at LEK, believes that thermal accelerometers and anisotropic geomagnetism offer advantages such as higher sensitivity, impact resistance, and stability, while reducing production costs due to declining average prices in the MEMS inertial sensor industry. This trend supports the maintenance of healthy profit margins. Sensors are becoming increasingly vital in the IoT ecosystem. The demand for sensor products has risen sharply, with a growing focus on high-tech MEMS sensors. Compared to traditional mechanical sensors, MEMS sensors are lighter, cheaper, consume less power, and are easier to integrate. Analysts predict that in the mature IoT era, sensors will be embedded in various devices, from mobile terminals to smart equipment and factory machinery. While companies like Huatian Technology, Jingfang Technology, Hanwei Electronics, and Huagong Technology are also exploring sensor applications, most domestic firms are still in the R&D or small-scale production stage. However, the Chinese MEMS sensor market is expected to grow at a rate of around 30% in the coming years. With strong government support for IoT, the sensor industry is poised for significant growth. According to the “2016–2021 China MEMS Sensor Industry Market Demand and Investment Planning Analysis Report,” the sensor market output value in China has exceeded 120 billion yuan, and it is projected to grow by 30% annually over the next five years. As the IoT continues to evolve, the sensor market will shift toward MEMS technologies. In Teng Yong’s view, the consumer electronics and automotive electronics markets are the primary drivers of MEMS sensor demand. China, being the world’s largest auto market and a major producer of mobile phones, presents vast opportunities for domestic sensor companies. While many Chinese automakers still rely on imported sensor technologies, there is potential for growth as local brands gain more market share. Despite challenges, Huacan and Meixin are well-positioned to capitalize on the expanding IoT landscape. Their focus on innovation, quality, and scalability ensures they remain competitive in a rapidly evolving industry.

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